Fitch rates Vikash Metal loans BBB-(ind)

Fitch Ratings said it assigned a national long-term issuer rating of BBB-(ind) to Vikash Metal and Power Ltd., along with a BBB-(ind) on its outstanding long-term loans aggregating Rs.417.3 million, national short-term rating of F3(ind) on its sanctioned non-fund based limits aggregating Rs.545 million and national long-term rating of BBB- on its cash credit limits aggregating Rs.311.3 million.

The outlook is stable.

The ratings reflect the company's strong volume growth aided by improvement in its product mix, successful implementation of its past projects and favorable demand outlook for steel in the short-to-medium term, Fitch said.

The ratings also reflect the company's graduation from an intermediate metaliks player into a value-added steel player catering to the construction sector, the agency said.

The ratings are moderated by suppressed margins coupled with raw material price volatility risks due to absence of backward integration, Fitch said.

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